Mumbai: RPG Group's tyre-making arm Ceat Friday announced formation of a joint venture company with the Bangladesh-based AK Khan & Company to set up a manufacturing facility in the neighbouring country.
The facility, which will come up at the investment of USD 67 million, is expected to be functional by December 2014, Ceat said in a statement.
The 110-tonne per day facility will roll out tyres for trucks, LCVs and 2/3 wheelers for the Bangladeshi market.
The joint venture, in which Ceat will hold 70 percent stake, is a part of the long-term strategy for both the partners to have a presence in the growing tyre market in Bangladesh, the release said.
"This strategic partnership will enable us establish a leadership presence in the large tyre market of Bangladesh," Ceat Managing Director Anant Goenka said.
Under the agreement, Ceat will provide technical and business expertise and manage the JV operations, while AK Khan will bring in knowledge of Bangladesh market besides providing the strength of "goodwill and local presence".
"The plant will earn valuable foreign exchange for the country by exporting approximately 20 percent of its output to the region and rest of the world," AK Khan Managing Director Salahuddin Kasem Khan said.